Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

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Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

Indianapolis' sports and convention board in coming months will head back to the negotiating table with the Indiana Pacers.

There's less than a year left in the Pacers' controversial three-year deal, struck in 2010 amid talk that the Pacers long had been losing money. The city's Capital Improvement Board agreed to pay the NBA team $30 million, in three installments, to offset the cost of operating Bankers Life Fieldhouse. It also spent $3.5 million on upgrades to the arena.

The CIB now has paid out all the money. The Pacers received the final $10 million installment Jan. 15, as spelled out in the agreement, which goes through June 30, 2013.

For the next round, the city's chief negotiator will be CIB President Ann Lathrop.

She said "hard negotiations" with the Pacers haven't begun yet, but she hopes to have a new deal hammered out before the current deal expires. Any terms are likely to meet some resistance in the City-County Council. The new majority Democrats were among the strongest critics of the 2010 pact.

The Pacers' overall tenant agreement at the fieldhouse lasts through 2019.

Indianapolis Star reporter Jon Murray and Mary Milz of WTHR-13, The Star's news-gathering partner, spoke with Lathrop last week about the coming talks. Here are excerpts.

Question: Where do you stand now, and when do you start negotiating?

Answer: I would tell you that we talk to the Pacers all the time. We're in constant communication with them. Can I tell you that hard negotiations have started? No, but we need to kind of look at the calendar and start looking at that, especially as we think about the budget and where we want to be over the next 11 months or so.

Q: Because your budget is due when?

A: Our budget will be submitted into the City-County Council towards the end of August.

Q: Don't you have to take the Pacers into account in that budget since it's going to be for the following year?

A: I think we have to consider what our options might be. You need to remember that we do have the ability and authority to go back to the council and ask for additional appropriations after the calendar year has started. And so the question is, would we want to estimate what we think might actually happen, or do we want to wait until we might actually know?

Q: What's your deadline?

A: I don't have a deadline. I really -- kind of like the last time -- I think we need to kind of really look at everything that's on the table facing the CIB.

Q: Will this be more of a long-term contract?

A: You know, I think overall (that) everybody would like to have a long-term tenant inside the building. This is one that fills the building over 60 days a year, plus all the other special events, so (a long-term deal) would be ideal at some point. But I'm not locked into it one way or the other.

Q: Are you looking at what the CIB will need from that contract at this point?

A: I think we're looking at everything we have on the table. As you know, over the last four or five years we had quite a few things and challenges that we've had -- whether it be the recession, special debt payments, a lot of different things with our new buildings. And so this is one factor that of course we look at as we look toward the future.

Q: The Pacers did really well this season in the playoffs. Does that make your job easier or harder?

A: You know, of course it makes it somewhat easier potentially, but I don't think you make these deals based on a season or how someone performs. You really have to look at the long-term impact to the city from an economic development perspective.

Q: So you'd like to have something in place before June 2013?

A: Absolutely.

Q: What's your timeline look like?

A: I'm not setting myself into a false deadline. We didn't do that the last time. I think it's important that we take a look, too, ourselves, at everything on the table.

Q: Is it safe to say you're going to put the same amount of money in the budget this year that you have in years past for the Pacers?

A: I wouldn't say that.

Basketball isn't played with computers, spreadsheets, and simulations. ChicagoJ 4/21/13

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Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

I'll be curious to see if the Pacers lower their demands this time around because of the new CBA revenue sharing. I think it's only fair they come down at least a little bit due to that.

I wonder if there's ever been a thorough investigation/evaluation as to whether or not the presence of the Pacers in Indianapolis makes the city money or not when considering the city's investment into the franchise/arena?

If it's a loss, I would argue it's an important cultural piece to invest in, like an art museum or anything else that may or may not turn a profit. If we lose these things in our culture, what's the point anymore?

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

What other city in this economy is going to offer the Pacers a state-of-the-art arena and an eight figure subsidy? The Pacers have no leverage.

Obviously not this one, so the offer from another city doesn't HAVE to be this big. If nothing else, the "new team" honeymoon attendance boost for 5 years for a team poised to go to the next level is enough to make another city with even a comparable offer attractive.

BillS

A bird in the hand is worth two in the bush.
Or throw in a first-round pick and flip it for a max-level point guard...

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

I wonder if there's ever been a thorough investigation/evaluation as to whether or not the presence of the Pacers in Indianapolis makes the city money or not when considering the city's investment into the franchise/arena?

PS&E paid for the study, so there is that.

edit: didn't realize that site makes you register before you can view it, this one should work for anybody

To those that did not click, the summary conclusion/assumption from PS&E is that as of 2010, losing the Pacers would result in an annual net loss of economic activity in Indianapolis of $55,000,000, an annual net loss to Indianapolis Government Bodies (fiscal impact) of $17,800,000, and 909 permanent full-time equivalent jobs.

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

At any rate, I expect the CIB to continue their subsidy, albeit at a reduced amount. The CIB's financial situation is improved from 2010 with the improving economy and expanded convention center bringing in additional visitors to spend money in the DT area. The Pacers' financial situation has improved as well- attendance will continue to rise and money from the revenue sharing agreements in the new CBA will start flowing.

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

Obviously not this one, so the offer from another city doesn't HAVE to be this big. If nothing else, the "new team" honeymoon attendance boost for 5 years for a team poised to go to the next level is enough to make another city with even a comparable offer attractive.

So what city fits this criteria? Kansas City? Omaha (yeah right)? Any others?

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

I'd guess Seattle, maybe Louisville, but the Pacers aren't going anywhere, this should go more smoothly than last time, given team performance and the new CBA lessening, even if slightly the burden placed on smaller market teams financially.

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

I think the government needs to get out of the business of supporting sports franchises...or at least treat them like other businesses. Tax breaks if they hire or based on how much revenue they bring into the city. There are many businesses here in central Indiana that could make the same argument for government funding...

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

I think the government needs to get out of the business of supporting sports franchises...or at least treat them like other businesses. Tax breaks if they hire or based on how much revenue they bring into the city. There are many businesses here in central Indiana that could make the same argument for government funding...

If they are going to do so, they need to do it for BOTH the Pacers AND the Colts, that's all I would ask.

BillS

A bird in the hand is worth two in the bush.
Or throw in a first-round pick and flip it for a max-level point guard...

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

I think the government needs to get out of the business of supporting sports franchises...or at least treat them like other businesses. Tax breaks if they hire or based on how much revenue they bring into the city. There are many businesses here in central Indiana that could make the same argument for government funding...

Until every other city gets out of the same business then Indy absolutely cannot- they put themselves at a major disadvantage otherwise.

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

I'd guess Seattle, maybe Louisville, but the Pacers aren't going anywhere, this should go more smoothly than last time, given team performance and the new CBA lessening, even if slightly the burden placed on smaller market teams financially.

Seattle doesn't have a stadium yet. Louisville is an even smaller market and U of L controls the YUM Center- no way a pro team defers to another tenant regarding use of the venue. Bankers Life is one of the best arenas in the country. Unless Louisville offers an insane subsidy (which won't happen) they aren't even on the radar as far as relocation is concerned.

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

Plus isn't there a ridiculous amount of money the Pacers would have to pay to get out of their lease anyway?

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Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

Until every other city gets out of the same business then Indy absolutely cannot- they put themselves at a major disadvantage otherwise.

It all comes down to whether it's a good financial investment for the city to make.

I don't think any part of that value has anything to do with the fans. Sure, it would hurt people here to see the Pacers leave, but many central Indiana citizens don't care at all and don't want their tax dollars being used to ensure the Pacers stay here. It would be like you and I paying for their golf club membership, simply because it's something they personally enjoy. This should all come down to whether an independent accounting shows that it's a net positive for Indy.

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Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

Things of cultural value, or affect the perception, prestige and status of the City don't need to be callously dollared and cented. Not everything exists to make a profit. The golf club analogy makes no sense. It is a club because it is exclusive, it isn't open to the public, thus you or I wouldn't necessarily be able to accrue the benefits of it, even if we wished to, thus the government has no incentive to invest in it. Also the gold club has no association with the city, and doesn't represent it in the way that the Pacers explicitly do. Letting a team go on those grounds would do nothing but diminish the city, there is another layer of value in sports teams beyond just economic considerations. This would be an awful place if the government only invested in things that made a profit for them.

Re: Soon it will be time to start paying attention to the Pacers/CIB deal again, new star article 7/15/12

Things of cultural value, or affect the perception, prestige and status of the City don't need to be callously dollared and cented. Not everything exists to make a profit. The golf club analogy makes no sense. It is a club because it is exclusive, it isn't open to the public, thus you or I wouldn't necessarily be able to accrue the benefits of it, even if we wished to, thus the government has no incentive to invest in it. Also the gold club has no association with the city, and doesn't represent it in the way that the Pacers explicitly do. Letting a team go on those grounds would do nothing but diminish the city, there is another layer of value in sports teams beyond just economic considerations. This would be an awful place if the government only invested in things that made a profit for them.

You are making some very big assumptions. Many people don't place any value (cultural or otherwise) at all on whether an NBA franchise exists in Indiana. It's not meaningful or of any value at all to them. Many people specifically don't like the NBA because, rightly or wrongly, they consider them overpaid prima donnas playing a child's game. I don't agree with that, but that view is still quite common. As a result, you are attributing things to people who might actually consider it a negative to have an NBA franchise and certainly don't consider it status they find valuable. This sentiment is not that rare and they shouldn't have to fork out their hard earned money so other people can enjoy their hobbies.

Edit: Part of what I am saying is that a huge number of people don't consider the Pacers to be "their team". It's a private company. There is no relationship at all with Indiana citizens or tax payers...other than what the private company can negotiate with the city. FWIW, I can understand some contribution to the arts, but that's only because it doesn't generate anything close to the same amount of revenue. I don't see many at the Caberet signing 15M/yr contracts...